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The New Era of Regulation S‑P: When Vendors Breach, the Clock Starts Ticking

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BakerHostetler strengthens Dallas commercial litigation bench with accomplished trial attorney and general counsel Lisa Staler Gallerano

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<a href="#fintech">U.S. Fintech Companies Announce Stablecoin Initiatives</a>

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<a href="#digital">U.S. Digital Asset Companies Continue Strategic Acquisitions, Integrations</a>

<a href="#major">Major U.S. Crypto Exchange Publishes Bitcoin Institutional Product Guide 2025</a>

<a href="#ethereum">Ethereum Network Activates First Phase of Pectra Upgrade</a>

<a href="#occ">OCC and SEC Commissioner Address Crypto, NH Establishes Bitcoin Reserve</a>

<a href="#bis">BIS Papers Analyze DeFi Risks, Crypto Cross-Border Flows</a>

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U.S. Fintech Companies Announce Stablecoin Initiatives

By <a href="https://www.bakerlaw.com/RobertAMusiala">Robert A. Musiala Jr.</a>

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Several major U.S. fintech companies recently announced stablecoin initiatives. In one development, Mesh, a Dubai-based digital asset startup, announced that it has integrated with the popular payment application of a major U.S. tech firm. According to a press release, the tech firm’s payment application has integrated with Mesh’s “proprietary SmartFunding technology, which allows users to pay with the crypto of their choice, such as BTC, ETH, or SOL, while merchants settle in the stablecoin of their choice, such as USDC, USDT, PYUSD, and others.” The press release notes that with the integration, users of the payment app “simply select the [payment app] option at checkout, authenticate with Face ID, and complete the transaction as they would with any fiat payment.”

In another development, a major U.S. fintech company announced the launch of “stablecoin-powered financial accounts accessible to businesses in 101 countries.” According to a blog post by the company, the new “Stablecoin Financial Accounts” will enable businesses to “hold a balance in stablecoins, receive funds on both crypto and fiat rails (like ACH and SEPA), and send stablecoins almost anywhere in the world.”

A third stablecoin-related announcement came from stablecoin startup BVNK, which announced that it has secured a strategic investment from the venture capital arm of a major global payments company. According to a BVNK blog post, the investment represents “a powerful validation of our vision to upgrade global payments with stablecoin technology.”

For more information, please refer to the following links:

<a href="https://www.prnewswire.com/news-releases/stablecoin-payments-are-now-available-on-apple-pay-through-mesh-302443024.html" target="_blank" rel="noreferrer noopener">Stablecoin Payments Are Now Available on Apple Pay Through Mesh</a>

<a href="https://stripe.com/newsroom/news/sessions-2025" target="_blank" rel="noreferrer noopener">Stripe accelerates the utility of AI and stablecoins with major launches</a>

<a href="https://www.bvnk.com/blog/visa-invests-in-bvnk" target="_blank" rel="noreferrer noopener">Visa invests in BVNK: Accelerating our vision for stablecoin payments infrastructure</a>

U.S. Digital Asset Companies Continue Strategic Acquisitions, Integrations

A major U.S. cryptocurrency exchange recently announced that it has “entered into an agreement to acquire Deribit, the world's leading crypto options exchange with approximately $30 billion of current open interest.” According to a company blog post, the acquisition “significantly advances” the company’s derivatives business, establishing it as “the premier global platform for crypto derivatives.”

In another new product announcement, Lightspark, a U.S. startup focused on the Bitcoin Lightning Network, recently announced a partnership with Revolut, a UK-based fintech bank. According to a Lightspark blog post, “Revolut is connecting to the open Money Grid and joining many other fintechs and wallets that offer new and exciting payments solutions, such as Lightning transactions or Universal Money Address (UMA).” The blog post notes that the partnership will allow Revolut to leverage Lightspark’s payment infrastructure for Revolut customers in the UK and select European Economic Area countries.

<a href="https://www.lightspark.com/blog/news/revolut-lightspark-announcement" target="_blank" rel="noreferrer noopener">Revolut Partners with Lightspark for Lightning</a>

<a href="https://www.coinbase.com/blog/coinbase-to-acquire-deribit-becoming-the-most-comprehensive-global-crypto-derivatives-platform" target="_blank" rel="noreferrer noopener">Coinbase to Acquire Deribit: Becoming the Most Comprehensive Global Crypto Derivatives Platform</a>

<a href="https://bitcoinmagazine.com/news/jack-mallers-strike-launches-bitcoin-backed-loans-for-eligible-u-s-customers" target="_blank" rel="noreferrer noopener">Jack Maller’s Strike Launches Bitcoin-Backed Loans for Eligible U.S. Customers</a>

Major U.S. Crypto Exchange Publishes Bitcoin Institutional Product Guide 2025

By <a href="https://www.bakerlaw.com/professionals/jonathan-cardenas/">Jonathan Cardenas</a>

The institutional investor division of a major U.S. cryptocurrency exchange recently published a report that provides a comparative analysis of the various financial instruments presently available to institutional investors who seek exposure to Bitcoin (BTC) and other digital assets. The report notes that as a result of the maturation of the crypto ecosystem, institutional investors are now able to invest in digital assets through a variety of financial instruments, which include, but are not limited to, spot trading, fixed-term futures, perpetual futures (perps), options, exchange traded products (ETPs), including exchange traded funds, and equity proxies. 

According to the report, U.S.-based institutional investors invest in crypto assets primarily through spot trading and ETPs, with BTC standing out as the most widely traded cryptocurrency among institutional investors. The report also notes that perps, which are not currently available to U.S. institutional investors, are the most actively traded product in crypto, with BTC perps reaching an average daily volume of more than $62 billion in 2024. The report suggests that recent shifts in the U.S. crypto regulatory landscape could potentially stimulate increased crypto investment from hedge funds, commodity trading advisers and other institutions.

<a href="https://www.coinbase.com/institutional/research-insights/resources/guides/bitcoin-guide-2025-products" target="_blank" rel="noreferrer noopener">Bitcoin: Institutional Product Guide 2025</a>

Ethereum Network Activates First Phase of Pectra Upgrade

By <a href="https://www.bakerlaw.com/RobertAMusiala">Robert A. Musiala Jr.</a><a href="https://www.bakerlaw.com/VeronicaReynolds"></a>

According to recent reports, on May 7, the Ethereum Foundation activated the first phase of Pectra, the latest major upgrade of the Ethereum Network. Improvements enabled by the Pectra upgrade reportedly include those related to validator deposit processing, cryptographic operations, historical data access, open execution layer exits and attestation efficiency. According to reports, the Pectra upgrade enables the following 11 Ethereum Improvement Proposals (EIPs):

EIP-7702. Enables EOAs to act like smart contract accounts during a transaction, unlocking features like sponsorship and delegation without migrating to SCAs.

EIP-7251. Raises validator staking limit from 32 ETH to 2048 ETH, reducing validator count and improving network efficiency.

EIP-7002. Allows validators to exit via the execution layer, enabling smarter, programmable staking workflows.

EIP-6110. Moves validator deposits to the execution layer for simpler, more transparent onboarding.

EIP-7691. Increases binary large object (blob) count per block to improve data availability and lower Layer 2 transaction costs.

EIP-7840. Standardizes blob scheduling across clients to support future scaling upgrades.

EIP-7623. Raises calldata fees to incentivize the use of blobs for rollup data, improving scalability.

EIP-7685. Creates a standardized format for execution-to-consensus layer communication, improving future upgrade compatibility.

EIP-7549. Optimizes consensus data structures for reduced bandwidth and better performance.

EIP-2935. Extends access to older block hashes, enabling more advanced on-chain apps and trustless randomness.

EIP-2537. Adds a gas-efficient precompile for BLS signature verification, supporting staking and cross-chain use cases.

<a href="https://decrypt.co/318275/ethereum-rolls-out-pectra-most-ambitious-upgrade-yet" target="_blank" rel="noreferrer noopener">Ethereum Rolls Out Pectra, Its ‘Most Ambitious Upgrade Yet’</a>

<a href="https://consensys.io/ethereum-pectra-upgrade" target="_blank" rel="noreferrer noopener">What Is Pectra?</a>

<a href="https://www.coinbase.com/learn/crypto-basics/ethereum-pectra-upgrade" target="_blank" rel="noreferrer noopener">Ethereum Pectra Upgrade</a>

OCC and SEC Commissioner Address Crypto, NH Establishes Bitcoin Reserve

By <a href="https://www.bakerlaw.com/professionals/john-e-robertson/">John E. Robertson</a>

On May 7, the Office of the Comptroller of the Currency (OCC) published Interpretive Letter 1184 confirming that national banks and federal savings associations “may provide and outsource cryptocurrency custody and execution services.” The letter specifies that this includes buying and selling digital assets held in custody on a customer’s behalf at the direction of the customer. Letter 1184 follows Interpretive Letters 1183 and 1170, which also concluded that banks may provide crypto-asset custody services.

In a recent speech, U.S. Securities and Exchange Commission (SEC) Commissioner Hester M. Peirce outlined her vision for the SEC’s regulation of securities tokenization. The Commissioner’s speech highlighted that the SEC’s Crypto Task Force has begun evaluating a potential exemptive order allowing firms to issue, trade and settle securities using distributed ledger technologies. According to the Commissioner’s speech, the exemption would be conditional, and several conditions or requirements will be considered, such as complying with market integrity conditions for the prevention of fraud and manipulation, user disclosures, recordkeeping and reporting requirements, allowing monitoring and examination by SEC staff, and restricting the number and types of tokenized securities. Peirce concluded the speech by noting that the potential exemption is a work-in-progress.

In New Hampshire, Governor Kelly Ayotte recently announced the signing of House Bill 302, which allows the state to “invest in cryptocurrency and precious metals.” According to reports, the bill limits the Treasury to investing in cryptocurrencies with a market capitalization of more than $500 billion. Reports of the signing indicate that New Hampshire has become the first U.S. state to establish a strategic Bitcoin reserve. This follows similar proposals in other states and an executive order establishing a “Digital Asset Stockpile” and “Strategic Bitcoin Reserve” at the U.S. federal level.

<a href="https://www.occ.gov/news-issuances/news-releases/2025/nr-occ-2025-42.html" target="_blank" rel="noreferrer noopener">OCC Clarifies Bank Authority to Engage in Crypto-Asset Custody and Execution Services</a>

<a href="https://www.sec.gov/newsroom/speeches-statements/peirce-iismgd-050825" target="_blank" rel="noreferrer noopener">A Creative and Cooperative Balancing Act</a>

<a href="https://cointelegraph.com/news/new-hampshire-bitcoin-reserve-law" target="_blank" rel="noreferrer noopener">New Hampshire governor signs crypto reserve bill into law</a>

BIS Papers Analyze DeFi Risks, Crypto Cross-Border Flows

The Bank for International Settlements (BIS) recently released two working papers addressing decentralized finance (DeFi). The first paper, BIS Paper No. 156, published April 2025, analyzes the features of DeFi that may introduce new financial stability risks. Specifically, the paper notes that DeFi will pose unique challenges in “new forms of information asymmetries, market inefficiencies and the risk of cryptocurrencies displacing local currencies in transactions in emerging markets.” The paper concludes with several targeted regulatory recommendations such as embedding regulation in the execution of smart contracts.

The second paper, BIS Paper No. 1265, tracks the flow of BTC, ETH, USDT and USDC across international borders. The paper examines the cross-border flow through several frameworks commonly applied to traditional financial activity. These frameworks, the paper concludes, indicate that geographical distance restricts crypto flow much less than it restricts traditional financial transactions, but tightening of global funding conditions correlates with a decline in cross-border crypto flows. The paper also finds evidence that stablecoins and low-value BTC payments are being used in the context of remittances. Finally, the paper concludes with recommendations for further research as crypto assets become more integrated with mainstream finance.

<a href="https://www.bis.org/publ/work1265.pdf" target="_blank" rel="noreferrer noopener">DeFiying gravity? An empirical analysis of cross-border Bitcoin, Ether and stablecoin flows</a>

<a href="https://www.bis.org/publ/bppdf/bispap156.htm" target="_blank" rel="noreferrer noopener">Cryptocurrencies and decentralised finance: functions and financial stability implications</a>

Blockchain Monitor

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Weekly Blockchain Blog – May 12, 2025

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